New Delhi, Accelerated funding activity is expected to create over 100 unicorns in India during 2022.

According to HDFC Securities, funding activities have created 42 unicorns in 2021.

In financial parlance, a startup is considered to have become a unicorn once it achieves a value of over $1 billion.

Last year, India added 42 unicorns in 2021 alone, taking the total tally to 79.

The country is ranked third in the world in terms of the total number of unicorns.

"The unicorn wave in India is still going strong: one unicorn has been added every five days within the first two months of 2022, and India is expected to have 100+ new unicorns in 2022," HDFC Securities said in a report.

"The optimism of investing in Indian internet ecosystem can be linked to the immense growth potential and problem solving or disruptive nature of startups."

Besides, the report said that the Covid-19 pandemic has accelerated internet adoption which has supported this trend.A

"The Covid-19 pandemic caused restrictions and lockdowns across the nation, which slowed business activity.

"But it turned out to be a huge catalyst for driving digital engagements, as people began to switch to online mode for various activities like shopping, payments, education, and e-commerce and businesses, realising the significance of having an internet presence, started to build their presence and capabilities for the online channels."

As of September 2021, there were 834 million internet subscribers in India, up 7 per cent YoY, with high-speed data access and low data rates being the most crucial aspects in people being able to transact online. In addition, the vernacularisation of the applications has been instrumental in attracting more users to the internet ecosystem.

"The top applications for India today are in the categories of e-commerce and social media, evident by the fact that people are increasingly transacting online for food deliveries and essentials like groceries, apart from fashion and electronics."

Furthermore, it cited that India saw record fund inflows of $66 billion across 2.1K deals in 2021.

"The large number of deals and high transaction values paved the way for the unicorn wave in India with companies across e-commerce, fintech, edtech gaining the coveted unicorn status against the backdrop of innovative and scalable business prospects."

In addition, it cited that sectors such as fintech and e-commerce account for 50 per cent of total funds coming in for startups, while healthtech, media-tech, foodtech and edtech combined accounted for 35 per cent of total funds invested.